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Clinton Taps Arthur Levitt Jr. As Nation’s Top Securities Regulator

April 29, 1993

WASHINGTON (AP) _ The next chairman of the Securities and Exchange Commission faces challeneges on many fronts and Arthur Levitt Jr., President Clinton’s choice for the job, says he’s ready.

″It’s an enormous responsibility but ... it represents a tremendous challenge to try to do something to protect and enhance the interests of American investors and American entrepreneurs,″ Levitt said Wednesday after Clinton announced plans to nominate the former chairman of the American Stock Exchange as the nation’s top securities markets regulator.

″Backed by 20 years of experience in high finance and newly introduced to the workings of Capitol Hill, Arthur Levitt is well prepared to take the helm at the SEC,″ Clinton said in a statement.

″I have full confidence he will use his office wisely to strengthen public confidence in our country’s financial agencies,″ the president added.

Levitt’s appointment to the nation’s top securities watchdog body is subject to confirmation by the Senate.

Levitt, 62, would succeed Richard Breeden, a Republican appointee who is expected to step down before his five-year term ends in June.

Clinton said he would nominate Levitt for the SEC and then designate him as chairman once he is confirmed. There already is a vacancy at the five-member SEC, which oversees the stock and bond markets as well as mutual funds and industry professionals.

Breeden, who has been waiting for months for a successor to be named, said he was ″very pleased the president has made his selection and I look forward to working with Mr. Levitt to ensure a smooth transition.″

Levitt’s nomination comes at time of heightened challenges for the SEC, which is under pressure to expand its regulatory activities with a shrinking budget.

Breeden told Congress earlier this month that the $255.4 million that the Clinton administration has earmarked for the SEC in fiscal 1994 will mean a cut of 42 positions - even as the agency is trying to beef up its oversight of the burgeoning mutual fund industry. The SEC has about 2,600 employees, less than 150 of them keeping tabs on the funds that now have $1.9 trillion in assets.

Still unresolved is the SEC’s role in policing the mammoth government debt market in the wake of the 1991 Salomon Inc. government bond trading scandal.

Legeislation that would give the SEC more authority over Treasury bond sales is pending in Congress.

Securities markets are becoming increasingly globalized, with the U.S. markets facing stiff competition from overseas exchanges. The SEC is conducting a long-term study, called Market 2000, that will address the global competition and as well as how to regulate securities markets in the next century.

There are renewed calls to combine the SEC, which oversees brokers, public companies, stock exchanges, mutual funds and financial advisers, with the rival Commodity Futures Trading Commission, which oversees commodity trading.

Some in the industry say Levitt, who will need help in determining how to allocate the commission’s strained resources, may be an ideal choice to guide the SEC through what will certainly be difficult times in the next few years.

Kenneth Liebler, president of Liberty Financial Companies and a former president of the Amex, called Levitt ″a good delegator.″

″His style is one of consensus as a manager,″ Liebler said. ″He tends to surround himself with good people and give them a strong degree of autonomy.″

But Levitt’s chairmanship of the Amex could raise suspicion in at least one quarter, the Nasdaq electronic stock market, a major competitor of the American Stock Exchange.

″I think it’s important to have a chairman who is independent and whose views on the issues are not preconditioned by prior experience,″ Joseph Hardiman, president of the National Association of Securities Dealers, which operates Nasdaq, said earlier this month.

Hardiman called Levitt ″an able, honest person and I think, hopefully, he could demonstrate that type of independence″ but ″until that’s demonstrated, then we have some reservations.″

Hardiman, out of the country when Levitt’s nomination was announced late Wednesday, was unavailable for further commment.

Levitt is owner of the Capitol Hill newspaper Roll Call and chairman of the New York City Economic Development Corp.

He helped raise $3.5 million at a New York for Clinton last fall, although he did not back Clinton in the primaries.

A native of Brooklyn, N.Y., Levitt headed the Amex from 1978 to 1990 and then left to found Levitt Media Co., which publishes Roll Call a newspaper covering Capitol Hill. A 1952 graduate of Williams College, Levitt was president of the predecessor firm of what is now Shearson Lehman Brothers before taking the Amex chairmanship.

His father was New York State comptroller from 1955 to 1978.

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